Every now and again, the traffic to specific posts surprises. Saturday’s "Shiller on the Housing Bubble" was just such a surprise — it accounted for nearly half of the weekend traffic.
New federal housing data show that the nation’s most overheated local housing markets now make up such a large share of the total U.S. market that a sharp fall in their values could stall or slow national economic growth.
The 22 major metropolitan markets with the fastest-growing house prices account for 35% of the value of the nation’s residential real estate, but just a fifth of its population, says the Federal Deposit Insurance Corp.
Their share of the national real-estate market has risen quickly. In 2000, the 22 markets accounted for 27% of all U.S. residential real estate. In 1995, the figure was just 24%.
Some economists say local bubbles are less worrisome than a nationwide one because they are more likely to pop individually, in response to local events, reducing the national fallout. And Federal Reserve Chairman Alan Greenspan recently has said that the U.S. has no national housing bubble, but there are "signs of froth in some local markets."
Even more interesting, the Journal assembled this chart of which housing markets are "booming" and have the most impact on national real-estate values . . .
Booming northeast and California housing markets dominate national real-estate value
|Los Angeles-Long Beach
|New York NY PMSA||1,145.7||6.6%||3.2%|
|Boston MA-NH PMSA||720.9||4.2%||2.1%|
|Chicago IL PMSA||631.9||3.7%||2.9%|
|Orange County CA PMSA||497.8||2.9%||1.0%|
|San Diego CA MSA||469.8||2.7%||1.0%|
|San Francisco CA PMSA||350.1||2.0%||0.6%|
|Nassau-Suffolk NY PMSA||323.1||1.9%||1.0%|
|Philadelphia PA-NJ PMSA||299.2||1.7%||1.8%|
Everett WA PMSA
|Newark NJ PMSA||224.1||1.3%||0.7%|
|Atlanta GA MSA||214.2||1.2%||1.5%|
|Baltimore MD PMSA||202.5||1.2%||0.9%|
|Phoenix-Mesa AZ MSA||196.9||1.1%||1.2%|
|Miami FL PMSA||194.8||1.1%||0.8%|
|Houston TX PMSA||182.1||1.1%||1.6%|
|Sacramento CA PMSA||179.3||1.0%||0.6%|
|Fort Lauderdale FL PMSA||172.8||1.0%||0.6%|
|Denver CO PMSA||171.2||1.0%||0.8%|
|Dallas TX PMSA||161.3||0.9%||1.3%|
|Las Vegas NV-AZ MSA||157.1||0.9%||0.6%|
Clearwater FL MSA
|Portland – Vancouver OR-WA PMSA||137.4||0.8%||0.7%|
Waterbury CT NECMA
|St. Louis MO-IL MSA||109.2||0.6%||0.9%|
|Orlando FL MSA||101.7||0.6%||0.6%|
|Kansas City MO-KS MSA||90.2||0.5%||0.6%|
|Pittsburgh PA PMSA||89.1||0.5%||0.8%|
|Cincinnati OH-KY-IN PMSA||78.7||0.5%||0.6%|
|Indianapolis IN MSA||67.1||0.4%||0.6%|
|San Antonio TX MSA||61.4||0.4%||0.6%|
|Total for Largest Markets||$10,012.4||58.1%||39.5%|
PMSA = Primary Metropolitan Statistical Area
MSA = Metropolitan Statistical Area
*Based on median values and number of units method
Source: Federal Deposit Insurance Corp.
Booming Local Housing Markets Weigh Heavily on Overall Sector
By Greg Ip
THE WALL STREET JOURNAL, June 20, 2005; Page A1